San Diego mayor decides millions in contracts without promised oversight

A Burtech Pipeline worker works on one of the streamlined Capital Improvement Program projects in North Clairemont on Nov. 2, 2012. The project, valued at $4.3 million, is one of ten that were fast-tracked under the new authority of the mayor’s office since July 1 | Photo by Brad Racino

With a unanimous vote on March 20, 2012, the City Council bulked up San Diego’s strong mayor form of government in a major way.

It gave the mayor’s office the sole authority to approve certain city contracts up to $30 million, many times higher than the spending thresholds of the county, the Port district, and the cities of Phoenix and San Jose combined. The strong mayor’s ceiling used to be $1 million.

The whole point was to speed up capital improvement projects, like filling potholes and upgrading water mains. Between July 1 and Oct. 1, a total of ten projects for approximately $36 million were awarded under his new authority.

But the increased power was balanced by a commitment to greater accountability — a major component of which was a website, full of details for the public and the council to monitor contractors and costs.

That hasn’t happened, and city officials can’t say when it will.

Whether the city’s next mayor is Councilman DeMaio or Congressman Filner, he will wield extraordinary power to shape the future infrastructure deals of San Diego — a city with approximately $3.5 billion slated for capital projects over the next five years.

inewsource has found that private citizens, civic groups, and even council members are more than a bit concerned about how that power will be checked.

In an email to council members, a resident of Golden Hill summed up the main concern among critics of the system:

“… if (the Council) hands the Mayor’s office the ability to award such lucrative city contracts, what will prevent the Mayor from unjustly awarding/rewarding those interests that placed him or her there?”

A broken system

Some of the reforms, approved by the council in March, were unprecedented. All were meant to streamline and modernize the city’s multi-billion-dollar Capital Improvement Program — the program that pays for maintaining and improving infrastructure such as parks, airports, water mains and roadways. Currently, there are more than 900 of these projects in various phases of completion.

An impetus for change came in June of 2011, when, after 18 months of research and writing, the Office of the City Auditor released a report highlighting inefficiencies in the program, including the complexity of the system itself. The Public Works Department — which manages nearly all of the city’s capital projects — agreed that changes were needed.

“The council was frustrated that we weren’t getting enough projects moving — we weren’t getting things in the street,” said James Nagelvoort, assistant director of the department.

“The public wanted the streets repaired… you have contractors and consultants who were hurting for business, who are looking for business, and the city of San Diego is back in the bond market. We have the buckets of money. But we weren’t moving it,” he said.

Add to that frustration the time and money spent bringing every project before the council.

“Every action that we took to get to council, on average: three months.” Nagelvoort said, and between $5,000 to $10,000 in “labor and time,” money that was taken out of each project’s working budget.

He referred to it all as a “perfect storm.”

Councilman Carl DeMaio isn’t worried about the CIP website, telling inewsource that the Sunshine Act and Proposition A will mandate the contracts be put online | Photo by Brad Racino

A solution

Seated in front of the council in March, Nagelvoort addressed Council President Tony Young.

Nagelvoort, accompanied by the director of the Public Works Department, Tony Heinrichs, had run through this pitch before — many times. The two department ambassadors had presented their reforms to the Budget & Finance Committee, the Citizen’s Equal Opportunity Commission, the Independent Rates Oversight Committee and numerous other public and private stakeholders since November 2011.

One of the key things Nagelvoort and Heinrichs wanted was the transfer of power to approve large contracts to the mayor’s office.

“We’re asking for this to be increased to 30 million dollars,” Nagelvoort said. “This would cover 99.9 percent of all the projects we’ve awarded.”

All this power would be balanced by transparency measures, they said, one of which would be a website complete with project names, descriptions, accounting information, timelines for completion and Equal Opportunity metrics — among other things.

The council sided unanimously with the proposal, and on April 5, 2012, implemented a new council policy — “Capital Improvement Program Transparency.”

The mayor’s power has been in place since July 1, 2012.

Yet today, the website is still absent some of the most critical information — like the names of contractors and actual amounts of funding. What does exist is a mix of knowns and unknowns: project ID numbers with estimated start dates; current project status’ next to estimated project costs.

And no one interviewed for this story can say when it will be complete.

Transparency

David Alvarez, one of the eight council members who approved the new streamlining provisions, said during a phone interview that the website “is definitely not what I was expecting when we voted for transparency measures.”

“I expressed my disappointment with the initial website when it first came out,” he said, later adding that he’s aware “some of the information is outdated.”

When asked if she had received updates or metrics on capital projects since the council’s vote, Councilwoman Sherri Lightner said her staff “doesn’t recall seeing any,” and would like “an explanation” as to why that is.

Other council members aren’t worried, or are waiting to see results before criticizing or praising the new process.

“It’s really early in the process,” Councilwoman Marti Emerald said, “but we are getting contracts out faster. I think some of the street work is happening faster.”

“Let’s give it a fair shot, and if it works,” she said, “hey, all the best.”

On Nov. 1, Councilman Todd Gloria told inewsource that the process is “a bit like repairing a plane while it’s in the air,” and what worries him most is not the lack of transparency — which “no one has forgotten about” — but what could happen under a new administration.

“A new administration with a new (public works) director may not be up to speed, may not have the same priorities (regarding transparency),” he said.

“If we’re repairing the plane in flight,” he added, “this would also be switching the pilot in mid-flight.”

Technical problems

Nagelvoort echoed others interviewed for this story in saying that a big issue rests in merging department data with software brought in to replace its infamous predecessor in 2007.

The department is trying to “work through the issues,” he said, adding, “this [issue of transparency] has been a new problem for us.”

Part of what the agency is struggling with is not only getting the information out, but making it digestible for the general public.

He let out a short sigh.

“The CIP program is complicated and it’s big,” he continued. “The amount of information we put out is enormous. And it’s hard to get through it all and understand what it means.”

Nagelvoort believes the department may be ahead of the curve when it comes to information sharing, citing efforts to make the annual budget more understandable, additional community outreach, and new chunks of information made available online.

But he admits that all that may not be enough.

“Yea we can post information,” he said, “but if we don’t help people understand what we’re posting, then so what? You have to understand who your audience is.”

Concerned Parties

Before and after the council action, numerous critics have expressed concerns with the new power of the Mayor’s office, including the Center on Policy Initiatives, the Community Budget Alliance, the League of Women Voters and at least one engineering firm.

Jeanne Brown, co-president of the League of Women Voters, told inewsource that her main issue is with the transparency measures.

“Now that we have the strong mayor form of government,” she said, “the mayor doesn’t sit with the City Council, and so has very little input from citizens’ groups, so he’s basically open to more influential interests that seem to be connecting with him.”

“It is the lack of transparency that seems to be happening that’s concerning to me,” she said.

Other measures

Although the increase in spending power is the most talked-about reform measure implemented in July, it wasn’t the only one authorized by the council. Other changes were enacted to streamline the capital improvements program.

A plane in mid-air

Councilman DeMaio, a mayoral candidate with a complicated history of transparency, has helped spearhead through council both the streamlining reforms and the “Sunshine Act” — a measure passed in October which mandates city contracts in excess of $25,000 be posted online and easily accessible.

Proposition A, passed in June, already mandates city construction contracts be posted online. But that has yet to happen.

When asked his opinion on the slow progress of the website, DeMaio said he saw both Proposition A and the Sunshine Act as safeguards, and made a bold promise about his administration if elected:

“On day one in office,” he said, “we’re going to make sure that those projects have to be placed online for the public to search and see.”

He harped on his point.

“That has to be an essential agreement — it’s not an option,” he said.

“It has to be a requirement.”

Despite multiple attempts in person, over the phone and through email, Congressman Filner declined to discuss with inewsource the capital improvement program and its lack of transparency.